Exxon Mobil’s Options Heat Up—31 Unusually Active Contracts Signal Key Trading Setups

The jobs report released on Wednesday sparked mixed reactions in the market, with investors grappling with the implications of the better-than-expected 130,000 jobs added in January. While some saw it as a positive sign for the economy, others expressed concerns about the lack of immediate interest rate cuts. Peter Graf from Amova Asset Management Americas described the report as a “10 out of 10” with positive surprises but noted the challenges it could pose for the incoming Fed Chair, Warsh, in convincing FOMC members to cut rates as mandated by the president.

However, not everyone shared Graf’s optimism. Some critics pointed out that the bulk of job growth came from the healthcare industry, which added 124,000 jobs in January. This skewed the overall report and raised questions about the diversity of job creation across different sectors of the economy. With manufacturing adding only 5,000 new jobs, financial services losing 22,000, and information-related businesses losing 12,000, concerns were raised about the health of the economy beyond the headline numbers.

In the midst of these discussions, unusual options activity caught the attention of investors, particularly in Exxon Mobil (XOM). The company saw a significant increase in call and put volume, with 1,149 contracts traded with volumes of 500 or higher. This surge in options activity, especially in calls, indicated a bullish sentiment among investors who anticipated good times ahead for the energy giant.

Taking a closer look at Exxon Mobil’s recent performance, the company reported its Q4 2025 results, which were deemed decent by analysts. While revenue slightly missed estimates at $82.31 billion, adjusted earnings per share exceeded expectations at $1.71. Production from key regions like the Permian Basin and Guyana accounted for a significant portion of the company’s output, although lower oil prices impacted revenue and earnings compared to the previous year.

Despite the challenges posed by fluctuating oil prices, Exxon Mobil managed to achieve an adjusted earnings per share of $6.99 in 2025, trading at 22.3 times that amount. Analysts viewed the stock as fairly priced to slightly overvalued, with an average target price below the previous day’s close. However, options traders appeared more bullish on the company’s prospects, leading to a divergence in opinions on its valuation.

In light of the unusual options activity and the company’s financial performance, investors considered various strategies to capitalize on Exxon Mobil’s potential upside. Among the suggested strategies were bullish approaches like buying long calls or engaging in multi-leg strategies, such as the Bull Call Spread and Covered Strangle. These options strategies aimed to leverage the positive sentiment surrounding Exxon Mobil while managing risks and maximizing potential profits. Even though the unusual options activity didn’t quite meet the criteria for being OTM, there are still ways to make it work to your advantage. Unfortunately, none of the calls from yesterday’s activity had a 37-day DTE and were OTM, but we can still look at alternative strategies.

One option is to substitute another call expiring on March 20. For example, let’s consider a $160 call from Thursday mid-morning trading. In this scenario, you could buy 100 shares of XOM at $154.59 each, sell one March 20 $160 call for $3.15 in premium, and sell one March 20 $155 put for $5.00 in premium. While there is a possibility of assignment for both the call and put, it is unlikely.

Assuming the share price at expiration is above $155 and below $160, you could potentially pocket $815 in income, resulting in an annualized return of 53.7%. If the put is assigned and you have to buy another 100 shares, the profit on the ExxonMobil shares bought is capped at $5.29 each if the share price is higher than that at expiration and the shares are assigned to the buyer of the call.

Another strategy to consider is a Long Ratio Call Spread, which aims to benefit from a sharp move higher in Exxon Mobil’s share price. This strategy involves selling one call short and buying two calls long with the same expiration date, with the strike price of the two long calls higher than the short call.

In this case, the short call’s strike price should be ATM, while the two long calls should be OTM or as close as possible. While there were no suitable options with DTEs between 30 and 60 days, we can focus on the March 27 expiration for a bear call spread. By selling a $152.50 short call and buying a $155 long call, you can minimize the maximum loss and potentially increase the maximum profit.

Overall, while the options activity may not have been ideal, there are still creative strategies to explore in order to optimize your trading opportunities. Keep an eye on potential shifts in the market and be prepared to adapt your approach accordingly. The Benefits of Mindfulness Meditation

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